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Ugo [173]
3 years ago
9

Jeff and Robert form KS VENTURES Corporation. Jeff transfers property (basis of $105,000 and fair market value of $90,000) while

Robert transfers land (basis of $8,000 and fair market value of $70,000) and $20,000 of cash. Each receives 50% of KS VENTURES Corporation’s stock (total value of $180,000). As a result of these transfers: a. Jeff has a recognized loss of $15,000, and Robert has a recognized gain of $62,000. b. Neither Jeff nor Robert has any recognized gain or loss. c. Jeff has no recognized loss, but Robert has a recognized gain of $20,000. d. KS VENTURES Corporation will have a basis in the land of $70,000. e. None of the above
Business
1 answer:
Komok [63]3 years ago
4 0

Answer:

The answer is: B) Neither Jeff nor Robert has any recognized gain or loss.

Explanation:

Both Jeff and Robert are contributing different assets to form KS Ventures Corporation. Jeff will transfer property at its fair market value ($90,000) and Robert will also transfer property at fair market value ($70,000) plus $20,000 in cash to equal Jeff's contribution. They haven't gained or lost anything, each still has 50% of stock ($90,000) of KS Ventures Corporation.

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